The sky is falling! The reports in the media lately have lead many people to believe that not only is the “Great Real Estate Boom” over, we are in store for a “great collapse”. It is my goal in this post to give you the true picture of the real estate market both local and national. I think you will find that in both cases we are still moving along in a normal manner, unlike what some markets have grown accustomed to in the past few years.
First off let’s tackle the national picture: The record boom is coming to a close. All of the areas that have seen astronomical price jumps are now seeing those numbers level out as inventory rises. Areas like Las Vegas which has averaged over 21% appreciation for the past 5 years, showed an 11% gain the past 12 months and an anemic .57% gain during the second quarter. The TV shows like Flip That House, that it seem like it is really easy to make money flipping houses, will have to find new territory, Las Vegas is yesterday’s news. Overall the appreciation rates are declining across the board with the areas that have shown the most appreciation slowing the most. Areas like ours, which did not participate in the recent boom are continuing to stay relatively stable and are not being sucked into the backwash of the price surge seen in places like Arizona, Florida and California. The rise in interest rates and the rise in inventory (when everyone is building) has caused markets to cool. We have not seen a crash but I don’t doubt that there will be price corrections in some markets that have appreciated at a pace above sustainability.
Locally, we have been more deliberate in the past few years. According to the Office of Federal Housing Enterprise Oversight, the Boulder County market has appreciated at an annual rate of 3.92% over the past five years. In the City of Boulder the figure looks like 6.9% and in the Boulder County part of Erie the appreciation has been just .5% per year. Locally, the number of sales has decreased 9.5% in the County and 4.2% in the City. As I mentioned before prices are still up for the year with the exception of Condos in the City which were stable. Since the end of July showings and sales have been at a slower pace.
As I have said many times, well priced homes in good condition are still selling. Have a great fall and call with any questions. I’d love to be of service!